What is a physical node?

I understand what a droplet is but I am unsure of what a physical node is. I received an email saying that one associated with one of my droplets had to be restarted, but I can't work out if this is an issue that requires any concern from my end.

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No, this is not a your issue. Physical node (or in some cases hypervisor) is place where our Droplets are being located. One node haves a lot of Droplets.
There are cases when upgrading node hardware or software requires node restart. When they restart node, all Droplets on that node are restarted.

In very most of cases your Droplet will automatically run again after reboot. But you can check is it up if you want to be absolutely sure.